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Lower rates are eroding the retirement savings of many Australians,  writes Chris Zappone. The Reserve Bank's recent rate cuts are benefiting young people at the  expense of the old, retirees say. For John Logan, a 66-year-old Melbourne  mainframe computer programmer  preparing for his retirement, a slide in interest rates has eroded the growth of  his term deposits and he is unmoved by complaints of younger mortgage  payers. "I put up with 18 per cent interest rates when I was their age,'' he said. Mr Logan holds little hope that rates rates will be nudged up to protect the  savings and cash holdings in his self-managed super fund. His frustration is felt by a generation of people at or near retirement age  who shifted funds out of shares to avoid the losses seen in the past few years,  only to watch in dismay as the banks whittle away their returns in response to  lower official rates. With...

The current interest rate cutting cycle, which began in November, is not aimed at boosting house prices or “re-igniting a boom in borrowing,” says RBA governor Glenn Stevens. Delivering a speech in Adelaide today called “The Glass Half Full”, Stevens said one thing Australia should not do is “try to engineer a return to the boom”. Stevens said he agreed that there was a need for more confidence in the economy among households and businesses, but said it had to be “the right sort of confidence”. “The kind of confidence based on nothing more than expectations of ever-increasing housing prices, with the associated willingness to continue increasing leverage, on the assumption that this is a sure way to wealth, would not be the right kind. “Unfortunately, we have been rather too prone to that misplaced optimism on occasion. “You don’t have to be a believer in bubbles to think that a return to sizeable price...

The Reserve Bank has cut its cash rate by 25 basis points, marking the biggest back-to-back monthly reductions since the depth of the global financial crisis. The central bank today dropped its key lending rate from 3.75 per cent to 3.5 per cent - its lowest level since November 2009. The onus will now fall on commercial lenders to pass the reduction on to borrowers. Today’s cut was expected by 13 of 27 economists polled by Bloomberg, with four of them tipping the RBA would repeat May’s surprise 50 basis-point reduction. The rest predicted no change. The central bank has now lowered its lending rate four times in its past seven meetings as slowing economic growth gives it more room to spur demand without risking a surge in inflation. The outlook for global growth, though, is dimming almost daily as Europe struggles to avoid a break-up of the eurozone, the US revival falters and...

[blue]Article by Michael Pascoe - Sydney Morning Herald - http://www.smh.com.au/business/dont-cut-rates--were-happier-whingeing-20120604-1zra9.html [/blue] Australia has marked the Queen's Diamond Jubilee by relieving the Poms of the  burden of being the world's biggest whingers – the UK now can enjoy the long  weekend and have a happy Olympic Games. Australians, though, have nothing but concentrated misery ahead of them: if  the economy is good, it will only get worse; if the economy is not good, it's  sure to become terrible; if the sun shines, we'll all get melanomas; and so  on. The national talent for highlighting the silver cloud's dark lining is on  display in the fevered calls for the Reserve Bank to cut its cash rate by 50  points tomorrow. Apparently Australia is in dire straits and urgently needs  greater monetary stimulus. Unemployment is skyrocketing, our key trading  partners are down the gurgler, there's no investment to speak of, the record low  yield on 10-year commonwealth...

[blue]Article by Jason Clout - The Age - http://www.theage.com.au/money/calculate-the-essentials-of-protection-20120526-1zbia.html [/blue] Imagine that you had a machine that  pumped out $100 notes. Would you insure  this miracle device? You'd be nuts not to. Well, that is analogous to what the  main breadwinner in a family does, points out Jordan Hawke, executive general  manager at Asteron Life, "yet they often won't insure themselves". Industry research suggests that protecting the family's lifestyle after death  or permanent incapacitation - or even protecting the weekly wage while off work  for a shorter term - has not been a priority for many. And that's because Australians traditionally have been ''more interested in  accumulating wealth than protecting it", Hawke says. <iframe id="dcAd-1-3" src="http://ad-apac.doubleclick.net/adi/onl.age.money/money;cat=money;ctype=article;pos=3;sz=300x250;tile=3;ord=1.9637659E7?" width='300' height='250' scrolling="no" marginheight="0" marginwidth="0" allowtransparency="true" frameborder="0"> < /iVALUE YOURSELF Actuaries at Rice Warner calculate a young couple aged 35 with children needs  $500,000 to provide even the bare minimum should the higher-earning partner of  the pair die. For older families,...

[blue]Article by Robert Laura, Contributor for Forbes - http://www.forbes.com/sites/robertlaura/2012/05/24/how-star-athletes-deal-with-retirement-financial-lessons/ [/blue] [dropcaps]T[/dropcaps]o quote pro golfer Annika Sorenstam, “I didn’t grow up really rich or especially poor but I was taught to respect money.”  She remembers her economic status as a child, noting, “Yes, I had to share my first set up golf clubs with my sister; I got the odd number clubs and my sister (who now works for Annika’s golf academy) took the even ones.” The athletes I interviewed earned millions of dollars playing their sport but none of them came from a wealthy family.  All either mentioned – or implied – that they came from a modest upbringing and that both the life lessons they learned growing up and their time as a pro play significant roles in their financial dealings today. NFL star Desmond Howard grew up in a middle class Cleveland, Ohio, community.  “My parents taught me the value of...

[dropcaps]M[/dropcaps]ultiple bathrooms are rated as number one on a wish list of features that buyers look for in a new home. The results of a national pool of 114 real estate agents have uncovered some surprising research about what buyers want. The survey, commissioned by Turf Australia, found that 42 per cent seek more than one bathroom and 41 per cent desire a quiet street. A decent sized backyard was the next most sought out by 34% of buyers, followed by being close to a bus route or shops (20%) and off-street parking (13%). It seems that it is not any old backyard that buyers want, but one with grass - the survey found that nationally a lawn could add 18 per cent, or just over $75,000 in value on the average $420,000 home. Three quarters of real estate agents said buyers want a safe playing area for their kids while a...

[dropcaps]N[/dropcaps]etworking is a great way to make contacts and establish relationships, but not everyone is good at small talk. Luckily there are tried and tested tactics for breaking the ice and getting a conversation going. 1. Be prepared Think through in advance some topics you can talk about. You don't need to have a shared interest to connect with others, you just have to share your interests - talking about something that you're passionate about will automatically engage those around you. You can also prepare some ice breaker questions in advance. Choose questions that are open-ended so the listener can't just answer with a yes or no. 2. Make the first move Finding someone to talk to in a room of strangers can be daunting but remind yourself it is preferable to standing by yourself. A good tactic for breaking into conversations is to make eye contact with someone, smile at them and ask: 'do...

Avoid these common mistakes and refinancing your home loan should be a simple, trouble-free experience. Successfully navigating the refinancing process can enable you to take advantage of better rates and features, as well as provide finance for a renovation, construction or property purchase. Mistake # 1: A history of arrears Lenders want to avoid taking on risk, which is why they ask for at least six months of loan statements in order to check your conduct. They won't be impressed with missed/late repayments or going over the limit on any lines of credit, so wait until you have six months of clean history before making an application. Mistake # 2: Too many credit enquiries Every time you submit an application to a lender, it is recorded on your credit report. When the lender sees a number of applications they wonder why your application hasn't yet been approved by another lender - this may be...

On 8 May 2012, the Federal Government handed down its Budget for 2012/13. It would be fair to say that everyone will be impacted in some way by the measures contained in the Budget itself, or by other recent announcements from the Government that will apply from 1 July 2012. [blue]Click here to download the full 2012 TECHknow Budget Update[/blue] Many of the measures in the Budget had been alluded to in the days leading up to the Budget itself, so there weren’t a lot of hidden surprises. However, one major surprise was the Government’s decision to defer the (re)introduction of a higher concessional contribution threshold for people aged 50 or over to 1 July 2014. Previous announcements has indicated a 1 July 2012 start date. This deferral announcement, along with many other measures released, does highlight the need to establish and have an on-going relationship with a financial planner. Whilst everyone is likely to...